May 12th, 2009
07:00 PM ET
6 years ago

Recession hits Social Security hard

NEW YORK (CNNMoney.com) - The recession has taken its toll on Social Security. The officials who oversee the program forecast Tuesday that the Social Security trust fund will be exhausted by 2037 - four years earlier than estimated last year.

The trust fund reflects a $2.4 trillion surplus paid into Social Security over 20 years that Uncle Sam has borrowed, spent and promised to pay back. Trust fund exhaustion represents the point at which only 76% of benefits could be paid out.

The main reason for the change in forecast: Demand for benefits has grown while money paid in has fallen because of growing unemployment and new tax breaks in the economic stimulus package passed in February.

Since the start of 2008, 5.7 million payroll tax jobs have disappeared. And another 4.3 million jobs are being filled on a part-time basis.

In the nearer term, the trustees estimate that Social Security will take in fewer taxes than the benefits that will be paid out by 2016. Last year, they estimated the near-term shortfall would occur in 2017.

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Filed under: Economy
soundoff (22 Responses)
  1. John

    Hope S.S. Is still around when I come of age I'am 54 now

    May 12, 2009 08:49 pm at 8:49 pm |
  2. SLM

    I see tax increases coming and also eliminating benefits for those who paid in that sacrificed for many years to prepare for their retirement. The Obama administrations ideals are to punish those that are responsible and reward those that weren't.

    May 12, 2009 09:14 pm at 9:14 pm |
  3. Henry Miller, Cary, NC

    That's why Social Security is nothing more than a Ponzi scheme. It lasted longer than most, and suckered a lot more people, but all that proves is that it takes a government to really screw up. And since FDR is long since dead, we can't even stuff him into the cell next to Bernie Madoff's.

    May 12, 2009 09:21 pm at 9:21 pm |
  4. Rob

    The Social Security Administration should do one of two things: either do away with the SSI program or tighten the disability determination. SSI was created in 1970 when the disability programs were taken away from the states. Under the social security administration, SSI has become a cash cow for anyone who wants extra money as well as for the lawyers those individuals hire. It's ill-supervised and plagued with fraud. If the social security administration wants to keep the SSI program, they should tighten the restrictions. There is no need for anyone with a claimed disability outside of the recognized list of permanently disabling conditions to be receiving taxpayer money. In my job, I see clients where the entire family receives an SSI check, with children all receiving SSI income for reasons such as ADD (which is also a money maker for the drug companies). I see adults who pursued their SSI determination with more energy than they ever pursued employment and are receiving SSI for conditions less disabling than the health problems our staff have.

    If all the unnecessary recipients were removed from the SSI rolls, those who are actually burdened by disability could receive more help and the total would be less costly.

    May 12, 2009 09:24 pm at 9:24 pm |
  5. 60's survivor

    the country needs to come up with an alternative. people may have less but perhaps medical and food costs can somehow be alleviated. we need to aim for quality not quantity!

    May 12, 2009 09:27 pm at 9:27 pm |
  6. joe smith

    all the more reason for our Senators/Congressman to reveal where they are putting their retirement funds, inthat the American people who are supporting this fund with their tax dollars can finally benefit, and live the good life in the waning years of their life too..do you really suppose Harry Reid would introduce legislation to allow every man,and woman, working in America to particapate in that retirement pool..

    May 12, 2009 09:27 pm at 9:27 pm |
  7. Doris House

    If this is the case, why in the name of common sense are they trying to add illegals to the social securty payroll?? DUH!!

    May 12, 2009 09:35 pm at 9:35 pm |
  8. S Callahan

    Guess it's time for me to stash the SS ck..and live on the other stuff...
    scary.....I ache to think of the financial future it holds for our American, or even worlds, children..

    May 12, 2009 09:44 pm at 9:44 pm |
  9. Chris

    It's funny how all these older people worked all their lives and yet when it comes time to retire we not only have given away $2 trillion dollars of "surplus" money, but we continue to tax working people and give their hard earned money to non-working, lazy, people who could care less about anyone else but themselves and how to beat money out of the government. It sounds like it's time to give this money to those retirees who earned it in the first place doesn't it?

    May 12, 2009 09:47 pm at 9:47 pm |
  10. mama 4 Obama

    this is scary.

    May 12, 2009 10:04 pm at 10:04 pm |
  11. Polly

    Our country came together in prayer the day after 9/11. We naturally knew what we needed to do. Who is going to lead us in the efforts to figure out how to deal with our country's financial problems? It's going to take everyone to work and sacrifice towards a common goal. Why keep letting this build up for future generations? Are there any proposed ideas coming out now? Let's get on it.

    May 12, 2009 10:25 pm at 10:25 pm |
  12. No Hillary = No Obama

    I want to know if Obama is going to bail out the SS system so I can get my well deserved benefits when I retire? Or is he just interested in corporate America and his grandiosity?

    May 12, 2009 10:31 pm at 10:31 pm |
  13. Johnnie Kay Totherow

    If the money that was borrowed would be paid back it wouldn't be in trouble. Try bailing out SS. Instead of giving to companies that abuse it. They should have never been allowed to borrow from it. It was a bad decision and someone is going to have to eat crow and pay it back. If we as citizens pay our taxes and SS No one of who has not ever worked and earned it should get it. No person coming from another country that didn't pay in should be allowed to collect. That's taking from us and then saying we don't have enough to have later for you. Even a child can see what's happening. If we teach our kids if you brorrow you pay back then why can't the government do what they expect us to teach every child.

    If we don't pay what we owe it's taken from us If the government can't pay it back maybe the government offiicails shouldn't collect. Either get the people off that never should have been collecting. Or You lose your SS. Look at it from that point of view. Everytime you vote for SS to go to someone of whom never put in here because they never lived here, Your SS should go to them. Maybe you'd stop! The other nationalities have come over and never been able to collect and their families had to sign documents that they would never try to collect because they were too old to work. The families had to support them and now mexicans are allowed to get SS and they've not paid in enough for it. No! Be fair! Capital Hill is starting to stink badly!!!!!!

    May 12, 2009 10:35 pm at 10:35 pm |
  14. Maggie

    This just goes to show everyone that the govenrment continues to drain our economy and our Social Security money pain d into it by our parents and grandparents. Now becasue of the Obama administraion we are in dager of not getting it in the future. Where does that lead us? Down down down. How can our future senious survuve ig all of our money is spent out on this health care reform obam plans and we have to barrow money we do not have. With all the ilegal aliens getting benifits and all the aid to outer countries that leave us out. befoer Obmas is out of office we will most likely will be distutute, people here in out genorous country will starve to death becasu the money ahs been spent out on those who have never paind into SS and all the plans Obama has of paying for EVERYONE'S EDUCATION REGARDLESS OF NO MONEY FROM THEIR FAMILIES. We are having to barrow barrow money for everything now. Even the money we give to other countries. Why is that?

    May 12, 2009 10:47 pm at 10:47 pm |
  15. Marty, Grand Rapids

    Time to raise taxes, cut benefits and raise the retirement age. Has to happen sooner or later.

    May 12, 2009 10:50 pm at 10:50 pm |
  16. Peter E

    Ever since Bush dug into the Social Security Trust Fund and used it as his own spare cash reserve it has just gone downhill. And no American generation is helping. They all just want their own selfish tax cuts, while blaming always OTHERS for the budget deficit and Social Security going bankrupt. Put your money where your big mouth is!

    May 12, 2009 11:05 pm at 11:05 pm |
  17. Scott

    President Obama,
    First Medicaide will go bankrupt, then Medicare will go bankrupt and you think the Democratic led congress can effectively create an national healthcare system? Let's control spending. The NIH as given over $2 Million dollars to study Chinese prostitues drinking habits. This is not where my hardworking tax dollars should be going. It would be a bad idea for the government to control my healthcare.

    May 12, 2009 11:06 pm at 11:06 pm |
  18. John

    Funny.

    Congress won't hesitate to give hundreds of billions of dollars to prop up poorly managed investment banks.

    Congress dithers and shows little similar interest in propping up Social Security.

    May 12, 2009 11:26 pm at 11:26 pm |
  19. Susan

    I think it's a shame that this country has been supporting people that aren't even citizens. They come over here and have children. Then they bleed our system and get away with it. But their entire families some of who are not legal citizens benefit from our programs. We the people are paying into the system so that illegal immigrants can take the money and send it to their countries. they don't pay one cent into the system. Something needs to be done. The Social Security system needs to change. The qualifications need to change. Illegals should not be able to benefit from our system unless they pay into it.

    May 12, 2009 11:32 pm at 11:32 pm |
  20. Tom in CA

    ..., and hopefully I'll be able to get my wife's Social Security benefits as a survivor. Otherwise, I'll have to go it alone on my CSRS pension.

    FYI: I don't qualify for Social Security on my own nor as a surviving spouse! That sucks!

    May 12, 2009 11:33 pm at 11:33 pm |
  21. Shayne in NH

    You shouldn't have to rely on Social Security. You should be smart enough to take care of yourself.

    May 12, 2009 11:41 pm at 11:41 pm |
  22. Steve in Las Vegas,NV

    Of course this will be a problem...When people's jobs are lost or worse... offshored, and they can't find work, there is no tax money coming in to take care of this.

    May 12, 2009 11:46 pm at 11:46 pm |